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Nannup’s jarrah mill to shut

One of Western Australia’s oldest timber towns has been thrown into limbo, with Nannup’s jarrah mill laying off half its workforce. About 30 people are expected to have their jobs axed in the restructure which was announced this week. Source: ABC News

In a letter sent to employees, Nannup Timber Processing (NTP) said the situation was ‘regrettable’ but was brought about by many factors out of its control.

Those reasons include the cost and quality of the jarrah being processed and a declining demand for its products in the current economic climate.

Warren – Blackwood MP Terry Redman said the town would suffer from the decision.

“There’s 60 workers on that site, half of which are likely not to be in their jobs in two to three weeks’ time and for a little community like Nannup, that is massive,” he said. “I call on the Government to do what it can to soften that.”

Mr Redman said the decision had taken him by surprise.

“It was out of the blue for me, I wasn’t aware that this was coming though I was aware that there was a bit of concern in the timber industry generally,” he said.

It’s understood NTP will close its green mill operations from September 6, but will keep its dry timber processing arm open for the foreseeable future.

The company said staff redundancies were secure and some employees will be offered positions in the dry mill.

Executive Director of Forest Industries Federation, Melissa Haslam, said the Australian manufacturing industry as a whole faces numerous challenges.

“There is a demand but the market is tough all round, we do have a lot of rising costs and manufacturing in Australia is pretty hard to stack up,” she said. “They’re going to be looking at all their options and re-assessing the long term viability of the mill.”

Nannup Shire President, Tony Dean, said the job losses equated to about 20% of the workforce in town.

“If you take that amount of buying power out of the town, then it will have a scathing effect on the Nannup economy of a whole,” he said. “Having said that, we’re always trying to grow our economy and even though it’s a sad, we’re not entirely pessimistic.”

Mr Dean said he sees the dry mill operating for another 12 months, but holds a bleak view of its future.

“It is a complete closure really, because once you stop cutting green jarrah, you don’t have dry jarrah do you? Once the green jarrah stops cutting in a couple weeks time, the dry jarrah will run out.

“The sad thing about this is [the company] put a lot of money into this over the last twelve months.

“It’s an excellent example of a modern mill.

“I understand that what [the owners] sell in Perth is high-end jarrah products – but the market for that is non-existent because the housing market is so poor.”

The news of the closure has sparked fears for other smaller timber mills in the state. John Clarke from the Institute of Foresters of Australia said cheaper imports of hard wood took their toll on smaller mills.

“The beautiful, wonderful forest management system that we do have here in WA does come at a cost,” he said. “And that cost is that timbers that get imported from other countries where forest management may not be as good as it is here in WA is put on the market at a cheaper cost.”

Mr Clarke said another contributing factor was jarrah was not as “fashionable” as it once was.

“I think that point does impact not just the Nannup mill but the other mills in the South-West.

“I would certainly hope that the saw mill component of the mill at Nannup and its log supply contract will be quickly sold to another business.”

The Minister for Forestry, Dave Kelly, said in a statement the decision was very disappointing.

“As soon as I was made aware of this closure, I reached out to Directors of Nannup Timber Processing Pty Ltd to see what assistance the State can offer to potentially reverse their decision,” he said.

Mr Kelly said he had directed the Forest Products Commission to meet with NTP on Thursday to see what assistance it could provide.